CLA-2 RR:CR:TE 965554 jsj
Mr. David M. Rickert
E. Besler & Company
P.O. Box 66361
Chicago, Illinois
60666-0361
Re: Revocation of HQ 961707 (Mar. 19, 1999); Lunch Box Style Metal Container; With or Without a Roughneck Thermos®; Tin-plated Iron or Steel; Set; Subheading 7326.90.1000, HTSUSA.
Dear Mr. Rickett:
The purpose of this correspondence is to advise you that the Customs Service has reconsidered Headquarters Ruling Letter (HQ) 961707 (Mar. 19, 1999) which was issued to you as a revocation of Port Decision C85024 (Mar. 31, 1998).
Headquarters Ruling Letter 961707 classified a metal container in the shape of traditional school lunch box in subheading 4202.19.0000, HTSUSA. We have reviewed that ruling and found it to be in error. The Customs Service is reclassifying the merchandise in subheading 7326.90.1000, HTSUSA. This ruling, therefore, revokes HQ 961707.
Pursuant to section 625 (c), Tariff Act of 1930, as amended, 19 U.S.C. 1625 (c), notice of the proposed revocation of HQ 961707 was published on June 19, 2002, in the Customs Bulletin, Volume 36, Number 25.
FACTS
The article subject to this reconsideration is a container that has the shape of a traditional school lunch box. It measures nine (9) inches in height, seven (7) inches in length and four (4) inches in width. It is composed of metal. Customs is issuing this revocation on the assumption that the article is tin-plated. No laboratory analysis has been performed to determine its precise composition.
The item has a secured top closure and a single carrying handle. It is not insulated. Customs is advised that it may be imported with or without a ten ounce “roughneck bottle” inside. No details regarding the construction of the bottle have been provided. Customs is advised that the country of manufacture is China.
ISSUE
What is the classification, pursuant to the Harmonized Tariff Schedule of the United States Annotated, of the above-described lunch box style metal container with a handle and a latch, imported with or without a bottle ?
LAW AND ANALYSIS
The federal agency responsible for initially interpreting and applying the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is the U.S. Customs Service. The Customs Service, in accordance with its legislative mandate, classifies imported merchandise pursuant to the General Rules of Interpretation (GRI) and the Additional U.S. Rules of Interpretation.
General Rule of Interpretation 1 provides, in part, that classification decisions are to be “determined according to the terms of the headings and any relative section or chapter notes.” General Rule of Interpretation 1. General Rule of Interpretation 1 further states that merchandise which cannot be classified in accordance with the dictates of GRI 1 should be classified pursuant to the other General Rules of Interpretation, provided the HTSUSA chapter headings or notes do not require otherwise. According to the Explanatory Notes (EN), the phrase in GRI 1, “provided such headings or notes do not otherwise require,” is intended to “make it quite clear that the terms of the headings and any relative Section or Chapter Notes are paramount.” General Rules for the Interpretation of the Harmonized System, Rule 1, Explanatory Note (V).
The Explanatory Notes constitute the official interpretation of the Harmonized System at the international level. See Joint Explanatory Statement supra note 1, at 549. The Explanatory Notes, although neither legally binding nor dispositive of classification issues, do provide commentary on the scope of each heading of the HTSUS. The EN are generally indicative of the proper interpretation of the headings. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989); Lonza, Inc. v. United States, 46 F. 3rd 1098, 1109 (Fed. Cir. 1995).
Commencing classification of the metal container in accordance with the dictates of GRI 1, the Customs Service examined the headings of Chapter 73, Articles of Iron or Steel, of the HTSUSA. Customs concludes the lunch box style container subject to this reconsideration is properly classified in heading 7326, HTSUSA, pursuant to GRI 1. Heading 7326, HTSUSA, more specifically than any other heading in the tariff schedule, describes the container.
Customs notes that heading 7326, HTSUSA, which covers “Other articles of iron or steel,” is a residual or basket provision into which merchandise of iron or steel not described by any other heading of Chapter 73 is classified. Although the classification decision arrived at by this office relies on General Rule of Interpretation 1, this determination was made by a process of elimination, only subsequent to considering all of the other headings of Chapter 73, particularly headings 7310, HTSUSA, and 7323, HTSUSA.
Heading 7310, HTSUSA, provides for “Tanks, casks, drums, cans, boxes and similar containers, for any material (other than compressed or liquefied gas), of iron or steel, of a capacity not exceeding 300 liters, whether or not lined or heat insulated, but not fitted with mechanical or thermal equipment.” The EN to heading 7310, HTSUSA, Explanatory Note 73.10, provides an illustrative list of “larger containers,” as well as “smaller containers” that are properly classified in heading 7310, HTSUSA. Explanatory Note 73.10. The smaller containers “include boxes, cans, tins, etc.” and are “mainly used as sales packings for butter, milk, beer, preserves, fruit or fruit juices, biscuits, tea, confectionery, tobacco, cigarettes, shoe cream, medicaments, etc.” (Emphasis added) Explanatory Note 73.10.
Although the container subject to this reconsideration falls within the EN description of “boxes, cans, tins, etc.,” it is not “mainly used as sales packings.” Explanatory Note 73.10. The container in issue, although it may be used as packing for candy or other merchandise, has uses beyond sales packing. Customs will not suggest the numerous uses to which this container may be put, but is of the conclusion that this container is significantly distinct from sales packing, precluding its classification in heading 7310, HTSUSA. See generally HQ 963670 (April 12, 2002) (discussing merchandise classified in heading 7310, HTSUSA, and providing a list of precedential Customs Service ruling letters).
Heading 7323, HTSUSA, provides, in pertinent part, for the classification of “Table, kitchen or other household articles and parts thereof, of iron or steel.” The Explanatory Notes to heading 7323, HTSUSA, state that this group “comprises a wide range of iron or steel articles…used for table, kitchen or other household purposes….” Explanatory Note 73.23. The EN further provides an extensive list of articles considered being for kitchen, table and other household uses. See Explanatory Note 73.23. Kitchen articles include items “such as saucepans, steamers…; frying pans…; kettles; colanders; …jelly or pastry moulds;…kitchen storage tins and canisters…funnels.” Explanatory Note 73.23(A)(1). Articles for table use include “trays, dishes, plates…sugar basins, butter dishes…coffee pots…tea pots; cups, mugs…cruets; knife-rests;…serviette rings, table cloth clips.” Explanatory Note 73.23(A)(2). Items enumerated as “other household articles” encompass articles such as “wash coppers and boilers; dustbins, buckets…watering- cans; ash-trays;…baskets for laundry, fruit, vegetables, etc.; letter-boxes…luncheon boxes.” Explanatory Note 73.23(A)(3).
It is the conclusion of the Customs Service, subsequent to a review of this list, that the container subject to this reconsideration, a school lunch box, is not analogous to the articles enumerated in EN 73.23. Merchandise properly classified in heading 7323, HTSUSA, is limited in scope to table, kitchen or other household articles made of iron or steel. The container under review in this reconsideration may not reasonably be described as a table, kitchen or household article. See generally HQ 956218 (Aug. 23, 1994), New York Ruling Letter (NY) C88472 (June 24, 1998), NY 813291 (Aug. 23, 1995) and NY 808180 (Mar. 24, 1995). The container subject to this reconsideration may be used around the home, but it is not designed nor specifically intended for table, kitchen or household use, precluding classification in heading 7323, HTSUSA.
It is Customs determination that the heading that is most descriptive of the lunch box container is heading 7326, HTSUSA. Heading 7326, HTSUSA, provides very simply for “Other articles of iron or steel.” Heading 7326, HTSUSA, as previously stated is a residual provision and encompasses the classification of “all iron or steel articles…other than articles included in the preceding headings of this Chapter or …more specifically covered elsewhere in the Nomenclature.” Explanatory Note 73.26.
Understanding that heading 7326, HTSUSA, is a residual or basket provision into which all merchandise properly classified in Chapter 73, HTSUSA, falls by default when a more descriptive heading in the chapter does not exist, the variety of iron or steel merchandise that is properly classified in heading 7326, HTSUSA, is broad. This is confirmed by a further reading of the Explanatory Notes. The Explanatory Note that corresponds to heading 7326, HTSUSA, Explanatory Note 73.26, offers an extensive listing of merchandise that is classified in heading 7326, HTSUSA.
Explanatory Note 73.26 (3) provides that heading 7326, HTSUSA, covers “Certain boxes and cases, e.g., tool boxes or cases, not specially shaped or internally fitted to contain particular tools with or without their accessories (see the Explanatory Note to heading 42.02); botanists’, etc., collection or specimen cases, trinket boxes; cosmetic or powder boxes and cases; cigarette cases, tobacco boxes, cachou boxes, etc., but not including containers of heading 73.10, household containers (heading 73.23), nor ornaments (heading 83.06).” (Emphasis added). The container subject to this reconsideration is not easily analogized to the “boxes and cases” specifically identified in the EN, but this is not necessary. The drafters of the EN, by employing the abbreviations “e.g.” and “etc.” in EN 73.26, exhibited an intent that the identified articles were only intended to be representative or illustrative.
It is the conclusion of the Customs Service that the lunch box container in issue and the articles identified by example in EN 73.26 share enough common features to warrant the classification of it in heading 7326, HTSUSA. The container in issue is essentially a metal box, the size of which according to a reading of EN 73.26 may vary significantly. The container is larger than trinket and cachou boxes, but smaller than tool boxes. It is not specially shaped nor is it internally fitted. The possible uses of the container are similar to the anticipated uses of the containers referenced in the EN. It may carry a variety of items, none of which fall into any particular category that might preclude classification in heading 7326, HTSUSA. As should be appreciated, there is no single example provided for in EN 73.26 to which Customs may point as the perfect example of a container similar to the one subject to this reconsideration. Customs has, however, demonstrated that there are a significant number of common characteristics between the container in issue and the “boxes and cases” illustrated in Explanatory Note 73.26 to warrant classification in heading 7326, HTSUSA.
Although Customs has discussed the similarities between the relevant merchandise and the items identified in the Explanatory Notes to heading 7326, HTSUSA, it is important to remember that since heading 7326, HTSUSA, is a basket or residual provision it is only necessary to determine that the Thermos® merchandise is not excluded from heading 7326, HTSUSA, nor specifically provided for elsewhere in the tariff schedule. Customs concludes that the merchandise is not precluded from classification in heading 7326, HTSUSA, nor is it specifically provided for in another tariff schedule heading.
Continuing the classification of the school lunch box style container at the subheading level, the container is classified in subheading 7326.90.1000, HTSUSA. See generally NY H81764 (June 19, 2001), NY F81395 (Jan. 13, 2000) and NY B80840 (Jan. 10, 1997). Subheading 7326.90.1000, HTSUSA, provides for the classification of
7326 Other articles of iron or steel:
Other:
Of tinplate.
The Customs Service specifically notes for the attention of the importer and the customs broker that Customs has not undertaken a laboratory analysis to confirm that the container in issue is tin-plated. Should the container not prove to be tin-plated, this would significantly impact the classification and rate of duty of this merchandise. See HQ 965063 (April 12, 2002) (a binding classification ruling classifying similar merchandise said to be tin-plated).
Should this container not be tin-plated, it would be classified in subheading 7326.90.8586, HTSUSA. Subheading 7326.90.8586, HTSUSA, provides for:
7326 Other articles of iron or steel:
Other:
Other:
Other:
Other,
7326.90.8586 Other.
It is noted that Customs, in PD C85024 and HQ 961707, classified this item in heading 4202, HTSUSA. Heading 4202, HTSUSA, provides for the classification of:
Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber, or of paperboard, or wholly of mainly covered with such materials or with paper.
Customs, during the course of this reconsideration, determined that the merchandise in issue was not similar to the items designated by name in the first part of heading 4202, HTSUSA, that aspect which precedes the semi-colon. It was also determined that consideration of the items listed in the second part of the heading was unnecessary because those articles must be made of specific materials and iron and steel, of which the instant merchandise is composed, are not enumerated materials. Since Customs determined that the metal container imported by Thermos® is not similar to the containers designated eo nomine in heading 4202, HTSUSA, Customs re-examined the headings of the HTSUSA and has concluded that the lunch box style container is properly classified in heading 7326, HTSUSA.
The Customs Service, in addition to having been requested to provide a binding classification ruling for the lunch box style container, was also requested to provide a ruling on the container when imported with the “roughneck” bottle. Customs, in examining this question, considered whether the container and the bottle were a “set” pursuant to GRI 3.
An examination of GRI 3 becomes appropriate when goods are prima facie classifiable under two or more headings. The container is classified in heading 7326, HTSUSA, and although the ruling request did not provide sufficient information to classify the bottle, Customs will assume that the bottle is classifiable in a different heading.
Continuing with the application of General Rule of Interpretation 3, GRI 3(a) provides that the articles should be classified according to the heading which affords the most specific description, unless the multiple headings under consideration refer to only part of the materials or substances contained in goods that are mixed or composite, or to only part of “items in a set put up for retail sale.” The container and the bottle are not mixed or composite goods, warranting inquiry into the issue of whether they cumulatively constitute “items in a set put up for retail sale.” General Rule of Interpretation 3.
The General Rules of Interpretation do not define the phrase “items in a set put up for retail sale.” The Explanatory Notes do, however, offer guidance. The precise phrase in GRI 3(a) “items in a set put up for retail sale” is not addressed in the EN. The EN do, however, address a similar phrase employed in GRI 3(b). The phrase employed in GRI 3(b) and discussed in the EN is “goods put up in sets for retail sale.” General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X). It is the conclusion of the Customs Service that the two phrases address the same issue.
Explanatory Note (X) to GRI 3(b) provides three factors to be considered when determining whether goods have been put up in sets for retail sale. The term is taken to mean goods which:
consist of at least two different articles that are, prima
facie, classifiable in different headings….
consist of …articles put up together to meet a particular
need or carry out a specific activity; and
are put up in a manner suitable for sale directly to
users without repacking…. [General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X) (a) – (c)].
A review of the HTSUSA and an examination of the container and the bottle establish that they are prima facie classifiable in different headings and are packaged in a manner suitable for sale directly to users. The issue that remains, the second of the three factors, is whether the articles as put up together “meet a particular need or carry out a specific activity.” General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X)(b).
The Explanatory Notes do not define the phrase “meet a particular need or carry out a specific activity.” Id. The EN do, however, offer examples of items put up together for sale directly to the user which constitute sets. The initial example consists of “a sandwich made of beef, with or without cheese, in a bun…packaged with potato chips (French Fries)….” General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X)(1)(a). The second example consists of items to be used together to prepare a spaghetti meal. The components include: (1) A packet of uncooked spaghetti; (2) A sachet of grated cheese; and (3) A small tin of tomato sauce, put up in a carton. See General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X)(1)(b). The third example is a hairdressing set. The items in this set include: (1) A pair of electric hair clippers; (2) A comb; (3) A pair of scissors; (4) A brush; (5) A towel of textile material; and (6) a leather case to store and carry the items. See General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X)(2). The final example of a set is a drawing kit. The drawing kit includes five items put up together in a case of plastic sheeting. The items are: (1) A ruler; (2) A disc calculator; (3) A drawing compass; (4) A pencil; and (5) A pencil-sharpener, put up in a case of plastic sheeting. See General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X)(3).
A review of each of the examples of sets in EN (X) indicates that components of sets share at lease one common trait. See HQ 953472 (Mar. 21,1994). The fact that the drafters of EN (X) did not explain when goods put up together “meet a particular need or carry out a specific purpose” suggests that resolution of the issue must be determined by analogy on a case-by-case basis.
The items that comprise each example of a set in EN (X) are related to one another in such a fashion that they interact together to serve a distinct purpose or function to enable a singular result to be achieved. The items in examples one and two are used in conjunction with one another to complete a sandwich meal and prepare a spaghetti meal. The articles in example three are used together for the purpose of hair grooming and the items in example four function with one another to enable the user to draw.
The Explanatory Notes, in addition to offering examples of items that constitute sets, also provides examples of collections of articles which do not function with one another to the degree necessary to establish a set. The initial accumulation of items in EN (X) consists of a can of shrimp, a can of pate de foie, a can of cheese, a can of sliced bacon and a can of cocktail sausages. See General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X)(1). The second example includes a bottle of spirits and a bottle of wine. See id. The items in the first example, although related to one another and usable together, do not “interact with one another so as to comprise a single dish.” HQ 953472 supra. It was concluded in HQ 953472 that the wine and spirits example did not constitute a set because the items would not be used together for the mixing of a single drink nor be suitable for serving together on a particular occasion. See HQ 953472 Id.
The issue in the instant ruling is whether the container has a nexus with the bottle such that both are intended to be used together or in conjunction with one another to meet a particular need or carry out a specific activity. It is the conclusion of the Customs Service that the metal container and the bottle will be used together or in conjunction with one another to meet a particular need or carry out a specific activity. The container provides a means of packing and transporting food and snacks and will be used with the bottle that will enable the user to store and transport a beverage. Customs understands that the food and beverage will be enjoyed at the same time and the container accompanied by the bottle facilitates this enjoyment. The container and the bottle function together to further a specific activity, the storage, transportation and enjoyment of food and beverage. They are a “set” pursuant to General Rule of Interpretation 3(b). See Generally HQ 088134 (Sept. 22, 1989) and HQ 959305 (Sept. 20, 1996).
General rule of interpretation 3(b) additionally provides that goods put up in sets for retail sale shall be classified as if they consisted of that component of the set that gives the set its “essential character.” The General Rules of Interpretation do not define the phrase “essential character,” but the Explanatory Notes offer a non-exhaustive list of factors which may be considered. The factors include: (1) The nature of the component; (2) Its bulk; (3) Its quantity; (4) Its weight; (5) Its value; and (6) The role of the component in relation to the use of the goods. See General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (VIII). Explanatory Note (VIII) to GRI 3(b) specifically states that the essential character of a set will “vary between different kinds of goods.” Id.
It is the conclusion of Customs that the lunch box style container provides the set with its essential character. The role of the lunch box is more fundamental to the set than the bottle. The container enables both the food items stored in the container and the beverage stored in the bottle to be transported. The role of the lunch box container, as previously stated in HQ 961707, is paramount to the overall use of both the container and the bottle.
HOLDING
Headquarters Ruling Letter 961707 is hereby revoked.
The tin-plated container with a hinge and a handle in the shape of a school lunch box, when imported separately, is classified in subheading 7326.90.1000, Harmonized Tariff Schedule of the United States Annotated.
The tin-plated container with a hinge and a handle in the shape of a school lunch box, when imported with the roughneck bottle, is classified as a set pursuant to General Rule of Interpretation 3(b).
The container provides the set with its essential character and the container and bottle set is classified in subheading 7326.90.1000, Harmonized Tariff Schedule of the United States Annotated.
The General Column 1 Rate of Duty for merchandise classified in subheading 7326.90.1000, HTSUSA, is FREE.
This ruling, in accordance with 19 U.S.C. 1625 (c), will become effective sixty (60) days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Acting Director
Commercial Rulings Division